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SMM Weekly Forecast on China's Silicon Metal Market
Jul 30,2010 17:33CST
smm insight

SHANGHAI, July. 30 (SMM) --


Profit at silicon metal producers further squeezed due to steady raw material price hike of petroleum coke and clean coal. It is rumored in the market again that electricity price may be adjusted up again at Hunan, Sichuan and other regions. Although such rumor hasn't been confirmed yet, some producers with low inventories began show increasing unwillingness to move goods. However, the silicon metal main producing regions are still during high-water period, and output of silicon metal will continue to increase, leading to oversupply of spot silicon metal.


Domestic silicon metal trading sentiment was significantly brisker than overseas trading sentiment, and trading volumes increased to certain extent last week. Some traders seek supply of low-priced #553 and #441 silicon metal caused by sell-off by some producers. In addition, demand for silicon metal from organic and polysilicon metal was stable, and trading volumes were also stable. However, demand from aluminum alloy industry, the largest silicon metal consumer, was still weak, resulting in overall weak demand for silicon metal.


Some silicon metal producing regions will enter into August low-water period in the following week. SMM believes that whether or not silicon metal prices will rebound back shall depend on demand recovery from home and abroad. Current demand for silicon metal is very weak, while producers' unwillingness to move silicon metal increased. SMM believes that silicon metal spot prices will continue to be stagnant, with downward momentum being curbed.


It is expected that mainstream traded prices will be around RMB 11,500/mt for #553 silicon metal at Huangpu port, around RMB 12,300/mt for #441 silicon metal, around RMB 13,000/mt for #3303 silicon metal and around RMB 13,500 for #2202 silicon metal.


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